Q: Dear Sir/Madam, We purchased an LLC company in 2018 for 300,000 dirhams. We invested an additional 200,000 dirhams, and I granted full executive power to the Managing Director in the memorandum of understanding, including the authority to buy, sell, and manage the company. However, the Managing Director recently sold the shop to another company without my knowledge or consent. We are four partners: the local partner holds a 51% stake with an 85,000 dirham investment, the Managing Director holds a 17% stake with an 80,000 dirham investment, the third partner holds a 16% stake with an 80,000 dirham investment, and I hold the remaining 16% stake with an 80,000 dirham investment. The problem is that the partners are now claiming that the company is losing money and cannot afford to pay rent or renew its license. However, I managed the shop until 2023 and calculated the profits every month. I received my share of the profits, and the other partners also received their share. However, when I went on vacation, they started claiming that the company was making losses and stopped paying me my share of the profits. I know that they sold the shop and received 120,000 dirhams, but they are still lying to me and refusing to pay me my share. I have requested the account statements for the past 11 months, but they have refused to provide them to me. Please advise me on my legal options!

Q: What is the process to close an LLC company which makes losses? I am a partner. My partner/ managing director didn't make any audit nor accounting for 5 years. I filed a case against him. He mismanaged the company and it went into losing more than the capital, 200% of the capital and he didn't inform me. What should I do?

Q: I am a 50% shareholder in a company at RAKEZ, and the 50% shareholder is my partner who has left the country and will not return. I cannot run the company alone. Next month the company is due for renewal, the expenses of which I cannot afford. I want to close the company. RAKEZ people say file a case and bring court papers to close the company. Where can I go, what should I do, can I get help? I do a small job in the shop.

An interview-format article covering the topic of shareholder disputes in the UAE and pre-emptive measure to be considered. This is from the legal podcast of lawyer Ludmila Yamalova, the founder of Lawgical with LYLAW.

It is the first article in a series of articles written by the author to give a better insight to the readers about the corporate governance practices under the best practice principles and the UAE legal system through innovative suggestions of its implementation for your organisation. Next series will be on the UAE regulatory framework on corporate governance.

The provisions of this Law apply to the commercial companies established in the UAE and the foreign companies that have established in the UAE a base to conduct any activity therein or established a branch or representative office. The Law abrogates Federal Law No. (8) of 1984 Concerning Commercial Companies.